The Executive has proposed a property tax cap of 4% (or 120 % of CPI, whichever is lower). Also, local tax limits would be subject to an “underride” - voter initiated propositions - that can restricted tax limits even more.

What does this mean for education funding?

• The state and local school districts share the cost of public education. The primary source of local revenue for education is the property tax.  

• The state has not paid its full share of the cost of - adequate and reliable state aid - of educating children and providing necessary supports.

• Without the state increasing state aid to education to make up the revenue lost due to a property tax cap, a cap would significantly reduce school districts’ spending without addressing the real causes of high property taxes. 

• In 2007 the State’s portion of aid to education was down to 44.3 % from 48.2 % in 2002.

• A tax cap does nothing toprevent public service costs beyond localities’ control from rising much faster than the cap (employee health insurance costs, special education costs, and the high gas cost of heating buildings and operating school buses).

• Strong state aid has helped school districts hold down proposed tax increases. Since the courts ordered the state to put billions more into schools, through the 2007  enactment of a new “foundation” aid formula, average proposed increases this year were down by almost half from two years ago(i.e., 3.3 percent vs. 5.9 percent in 2006-07).  

• A tax cap will not lower taxes or prevent them from going up, they will go up.

• Tax caps, if enacted, would have cost New York schools $1.3 billion in funding over the past four years.

• A cap already exists: When a school district budget is defeated, the district must adopt a contingency budget that is capped at 120 percent of CPI or 4 percent, whichever is lower. 

How does a tax cap affect education issues?

• A cap will undo progress made toward achieving funding equity across school districts. Through the new “foundation formula” the State has begun to address these inequities and begin to close the achievement gap.

• Studies have also found strong evidence that property tax caps lead to lower student test scores, higher dropout rates and a reduction in teacher preparedness.

How do tax caps disproportionately hurt lower-income school districts and communities?

• State aid covers a much smaller portion of school budgets in wealthier communities and much larger portions in needy school districts.

• Lower-income communities, whose students need the most help to reach higher standards, are less able to have the votes (a supermajority of either 55 percent or 60 percent) to override property tax caps and raise the revenue needed to cover costs to provide the necessary supports – leaving them even worse off and widening the achievement gap.   

What else should I know?

A tax cap takes away the voice of voters - New Yorkers have and want to keep local control.   

When asked to choose between quality schools and lower taxes, New Yorkers repeatedly choose investing in their public schools. This year, voters approved nearly 93 percent of school budgets statewide. In fact, voters approved 84.3 percent of budgets with tax increases greater than 4 percent proposed by the Property Tax Commission.  

In other states:

• Similar caps have failed in Massachusetts and other states because they do not address rising costs beyond the control of school districts, inevitably leading to cuts to education programs that serve children and other public services.

• In California, Proposition 13 destroyed the quality of public education and led to disastrous cuts in programs and harmful increases in class size.